I have a friend who went to a state school and got a Bachelor’s Degree. When last I heard, his student loan payment was larger than our mortgage payment. He’s the friend that has more luck than anyone else I know, I just can’t figure out whether it’s good or bad. While the student loan balance hanging over his head isn’t the only problem he has, it is a large problem that he will have with him for the rest of his life.
When my friend was in college, he thought he’d get a job making tons of money, so he didn’t worry about the student loans. Another friend and I tried to encourage him to borrow less and get out of school sooner. My friend went to college for the maximum number of semesters and took the maximum loan every semester. Worse, my friend works in a field totally unrelated to his degree.
I have a friend who has an two year degree who is much better off financially than my friend with the four year degree. I suspect that has to do with the fact that has to do with his having the good fortune to get out of school and pay off his student loans before my friend with the four year degree.
Our government seems to be steering everyone to a four year degree and crushing student loan debt. Don’t get me wrong, I think everyone should do some form of education or training after high school. IF there is one thing that successful people share, I suspect it is the desire to never stop learning. It is however a mistake to drive everyone to the one size fits all plan that is a four year college degree. Everyone kid in high school should come up with a plan for what they’re going to do after high school. For many of those kids, that plan will include a four year degree. But for many of those kids, there’s a good plan that doesn’t include a four year degree.
Every time I think about my friend with the degree and the crushing debt, I have to wonder about all those who went to college and left without their degree. How are they going to pay their student loans? Or more importantly, how are they going to get on with their lives?
As Kevin Drum says in this article, student loan debt is a real problem. The chart says a lot. However here are two things the chart doesn’t say. It is an awful problem that will still be around even if we drop the interest rate on student loans to zero. More importantly, the government created this mess in an effort to help people!